Volume Xiv 1989 Number 1 Liberian Studies Journal -8

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Volume Xiv 1989 Number 1 Liberian Studies Journal -8 VOLUME XIV 1989 NUMBER 1 LIBERIAN STUDIES JOURNAL I 10 °W 8 °W LIBERIA -8 °N 8 °N- MONSERRADO MARGIBI -6°N RIVER 6°N- MILES I I 0 50 MARYLAND Geography Department °W 10 8°W University of Pittsburgh at Johnstown 1 I Published by THE LIBERIAN STUDIES ASSOCIATION, INC. PDF compression, OCR, web optimization using a watermarked evaluation copy of CVISION PDFCompressor Cover map: compiled by William Kory, cartography work by Jodie Molnar; Geography Department, University of Pittsburgh at Johnstown. PDF compression, OCR, web optimization using a watermarked evaluation copy of CVISION PDFCompressor VOLUME XIV 1989 NUMBER 1 LIBERIAN STUDIES JOURNAL Editor D. El wood Dunn The University of the South Associate Editor Similih M. Cordor Kennesaw College Book Review Editor Dalvan M. Coger Memphis State University EDITORIAL ADVISORY BOARD Bertha B. Azango Lawrence B. Breitborde University of Liberia Beloit College Christopher Clapham Warren L. d'Azevedo Lancaster University University of Nevada Reno Joseph S. Guannu Thomas E. Hayden Cuttington University College Africa Faith and Justice Network Svend E. Holsoe J. Gus Liebenow University of Delaware Indiana University Corann Okorodudu Glassboro State College Edited at the Department of Political Science, The University of the South PDF compression, OCR, web optimization using a watermarked evaluation copy of CVISION PDFCompressor CONTENTS THE LIBERIAN REFINERY, A LOOK INSIDE A PARTIALLY "OPEN DOOR" ....................................................... 1 by Garland R. Farmer HARVEY S. FIRESTONE'S LIBERIAN INVESTMENT: 1922 -1932 .. 13 by Arthur J. Knoll LIBERIA AND ISRAEL: THE EVOLUTION OF A RELATIONSHIP 34 by Yekutiel Gershoni THE KRU COAST REVOLT OF 1915 -1916 ........................................... 51 by Jo Sullivan EUROPEAN INTERVENTION IN LIBERIA WITH SPECIAL REFERENCE TO THE "CADELL INCIDENT" OF 1908 -1909 .. 72 by Monday B. Abasiattai PRODUCTION TARGETS AND INPUT USAGE IN THE AGRICULTURAL DEVELOPMENT PROJECTS IN LIBERIA (1978 -1983): A LINEAR PROGRAMMING SOLUTION ........... 91 by Jacob Pereira -LUNGHU BOOK REVIEWS Dunn, D. Elwood and S. Byron Tarr, Liberia: A National Polity in Transition 106 by Debra L. Newman Fuest, Veronica, Agricultural Training In Liberia: An Empirical Study of the National Youth Training Center and Its Graduates ......... 109 by William B. Kory Johnson, Charles S., Bitter Canaan: The Story of the Negro Republic 111 by Martin Ford RECENT PUBLICATIONS ...................................... ............................... 116 COMMENTS ............................... 118 NEWS AND NOTES ... ............................... 123 CONTRIBUTORS TO THIS ISSUE ......................... ............................... 130 A referee journal that emphasizes the social sciences and humanities, the LIBERIAN STUDIES JOURNAL is a semiannual publication devoted to studies of Africa's oldest republic. The annual subscription rate is $25.00, $12.00 for students and $40.00 for institutions, and includes membership in the Liberian Studies Association, Inc. All manuscripts and related matters should be addressed to The Editor, Liberian Studies Journal, Department of Political Science, The University of the South, Sewanee, TN 37375. Subscriptions and other business matters should be directed to The Executive Secretary, Liberian Studies Association, P. O. Box 1043, Oak Park, Illionois 60304. The views expressed herein are those of the individual contributors and do not necessarily reflect those of the editor or the Liberian Studies Association, Inc. Copyright 1989 by the Liberian Studies Association, Inc. ISSN 0024 1989 PDF compression, OCR, web optimization using a watermarked evaluation copy of CVISION PDFCompressor The Liberian Refinery, A Look Inside A Partially "Open Door" * Garland R. Farmer Fashions in economic development tend to change with a frequency rivaling that of haute couture, and few attitudes have been more fickle than that of policy makers -national and international- toward foreign investment. The courtship of every possible investor has alternated with degrees of restriction and exclusion. Liberia has a rich history from which to draw guidance in assessing foreign investment and the inducements used to attract it. A number of well -known studies of the subject already exist, and the present writer would not try to embellish on their scholarly pages. What follows is one of what may, given time and energy and a reasonably reliable memory, turn out to be several similar examinations of undertakings begun during the heyday of the Open Door Policy in which the writer either participated or was able, as with the refinery, to observe at close range. Perhaps such personal retrospections will flesh out the more formal studies and even be of some use to any future policy maker who may find value in past experience. Few projects established under Liberia's Open Door Policy have endured and survived such controversy as the Liberian Petroleum Refining Corporation (LPRC) and its predecessor. Well -publicized maneuvering in 1987 about "privatisation" of the company gave way in 1988 to a furor over control of its funds, which reportedly contributed to the departure of American "experts" charged with tidying up Government finances. Eagerness to own LPRC or to control its funds suggests it has been profitable. Indeed, Liberian President Samuel Doe said in his Annual Message on January 29, 1988 that higher payments by the refinery and the maritime agency produced a 5% increase in Government revenues in 1987 over 1986. As often the case with the refinery, however, things may not have been all they seemed. Consider its profitability in 1987 in the light of what the world's largest oil company, EXXON, told its shareholders in its Annual Report for the same year: ". .earnings from refining and marketing operations were significantly below 1986. .Refined product margins were severely depressed during most of 1987..." Or, the TEXAS MONTHLY magazine's report in May, 1988: "...the profit margin at oil refineries is as bad as the smell," because, "Prices for the products they sell. ..have fallen faster than the price of crude oil." It is not unfair, then, to wonder whether LPRC's profits at a time when refineries worldwide were losing money arose from its monopoly on the supply of petroleum products rather than from any refinery operations. This thought Liberian Studies Journal, XIV, 1 (1989) 1 PDF compression, OCR, web optimization using a watermarked evaluation copy of CVISION PDFCompressor 2 GARLAND R. FARMER is reinforced by the report that recent shortages of gasoline in Monrovia were due to the "late arrival of a cargo" from the Ivory Coast, or to shortages of foreign exchange to purchase petroleum products. It seems timely to take a fresh look at this product of an Open Door Policy which, for better or worse, played a major role in shaping today's Liberia. There follows a two -part look at the refinery: first, its history; then, its finances. Together, these help provide some sense of the puffery, the peddling and buying of influence, and the complicated financial arrangements which sometimes surrounded projects launched during the 1960's. PART I: THE HISTORY Enter the "Texas Oilmen." The refinery was the brainchild of a self-proclaimed "Texas oilman," who came to Liberia in 1961, complete with ten -gallon hat, cowboy boots and flamboyant manner: Alex W. Hutchings (later transmogrified in the local press to "Dr. Alexander Hutchings "). I first saw Hutchings at President W. V. S. Tubman's Totota farm in March of 1961. At the Saturday afternoon cocktail hour, the parlor was alive with grandiloquent talk of a refinery which Hutchings intended to construct in partnership with a companion, whom he introduced as "Mr. Wink, inventor of the Wink drill bit, who's ready to take a 'one bite'. .In the oil business, Mr. President, a 'one bite' is a one million dollar participation." (The visibly uncomfortable Mr. Wink must have found the bite too big; he was not seen in Liberia again.) Before sunrise the next morning, the President sent for me to join him for coffee on the veranda of the "farm house." As we watched the grazing zebras and giraffes, he asked what I thought of the refinery. Knowing only what Hutchings had said the previous evening, I could have no opinion, but did offer to try to find some expert advice, which the President asked me to do, together with his Ambassador in Washington, S. Edward Peal. Friends in the "independent" sector of the oil industry suggested a petroleum industry expert, Walter Levy, whose objectivity and measure were impressive. Despite Levy's plea that he had no time just then, Peal was persuasive, and Levy was soon analyzing a letter agreement signed on July 10, 1961 by the Liberian Government and the Hunt International Petroleum Company, owned by the fabled Texas oil magnates, whom Hutchings had, by then, interested in the project. Levy recommended against this agreement. Those who saw the report said his opinions were that: PDF compression, OCR, web optimization using a watermarked evaluation copy of CVISION PDFCompressor THE LIBERIAN REFINERY 3 -granting a monopoly to any key element of an economy is always a gamble; -one might defend a monopoly on petroleum products if that would protect a refinery utilizing domestic crude oil, but such was not Liberia's case; -the domestic Liberian market being limited, despite expanding iron mines, and not offering economies of scale, it was almost inescapable that such a monopoly would result in higher prices for Liberian consumers. Then Secretary of Commerce Stephen Tolbert -ever suspicious of American business -rejected the report, contending that Levy was biased in favor of the large oil companies which wanted to block this potential competition. (In fact, the oil companies then operating in Liberia- Texaco, Mobil, B.P., Shell and Agip-did oppose the refinery, but Tolbert's suspicion about Levy's bias was not shared by the many governments which consulted him during the oil crises of the 1970's). Even so, the government followed many of Levy's suggestions, negotiating a number of "Clarifications" of the Oil Refinery Agreement, signed on October 4, 1961, which: 1.
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